Benson Quinn Commodities Inc. Minneapolis, MN Wheat December 19, 2014 Settlements: MWH5 MWK5 MWN5 Close 648 ¼ 654 660 ¾ Change -12 ¾ -13 -12 ½ High 660 ¼ 665 ¾ 671 ¾ Low 643 ½ 649 ½ 655 KWH5 KWK5 KWN5 666 670 ¼ 672 -17 ¾ -17 ¼ -16 ¼ 682 ½ 685 ½ 686 661 ¾ 666 ½ 666 ½ WH5 WK5 632 ¼ 635 -23 -21 ¾ 654 ½ 655 629 ¼ 635 Review: Wheat futures were down hard overnight as the short covering rally has either abated or at least took a breather. There were signs yesterday that this was the case. The actual mechanics of today’s trade are much more convincing. Despite various comments out of Russian related export curbs/raising prices to buy intervention wheat and holding more auctions to do just that, it seems the trade is trying to move beyond the Russian story. Between the trade accepting the idea global sellers can cover a reduction in Russian exports and problem short position holders seemingly haven been forced out of their positions, there were fewer emotions in the wheat market today. Additionally, India expressed interest in offering wheat to the global market, which would very likely take place if values remain high. It’s easy to make the case that US wheat futures and wheat values in general are going to have to find value. However, I wouldn’t count out the volatility in this market. The weakness that developed yesterday and today’s selloff amount to a much needed correction. Technicals did weaken with today’s price action, but lower prices are needed to turn the tide. The Russian story may be getting a little stale, but there is a chance the next statement could be viewed as supportive by the fund community. I expect the commercial would be happy to sell it to them. Funds were estimated sellers of 8,000 Chicago wheat contracts in relatively light volume compared to the price action. Producer selling in Mpls was noted, but slowed considerably with the price break. Cash markets did not respond to today’s lower price action as time will be needed to grind through recent movement. Informa estimated all wheat acreage at 56.8 m acres and winter wheat acreage 42.2 m acres. Winter wheat acreage was split 30.9 m acres for HRW and 7.9 m acres for SRW. The SRW number was down 560,000 from the prior year, but about a 500,000 above what the trade had discounted. This probably added to the weakness in Chicago. HRW acreage was estimated 400,000 above previous. The COT report, including options, as of Dec 16th has funds adding 13,000 Chicago wheat to their net long position. They were net buyers on Wed and Thurs. They added a few long in KC and sold nearly 1,800 in Mpls. Absent a new supportive headline, I’d look for lower price action. Brian Henry Volume/Open Interest (# of Contracts): Volume Open Interest MW 13,906 66,990 KW 32,203 130,003 W 170,618 368,070 Net Change +773 +375 +2,143 Technicals: MWH5 KWH5 WH5 Support 620 614 582 Resist 680 ½ 705 ¾ 677 USDA Weekly Export Data: Date Inspections (MT) 12/11 Wheat Sales (MT) 12/11 HRS (MT) 12/11 HRW (MT) 12/11 SRW (MT) 12/11 Domestic Rail Market: HRS: Mar Protein 13.00 13.50 14.00 14.50 15.00 Basis Change nc --/+55 +160/+200 +175/+210 --- +475 --/-15 Change -35 -35 HRS Daily Receipts Cars 31 50-Day MA 596 ¾ 614 561 Trade Est. 200-350 Actual 385,974 476,300 107,400 164,900 83,800 300-500 N/A N/A N/A HRW: Mar +100 +75/+130b HRS PNW Month Basis Jan +300/H Feb +300/H 20-Day MA 622 640 596 ½ Protein Ords. 11.00 12.00 13.00 14.00 +85/+95 +85/+95 +85/+95 +90/+100 +115/+125 Basis Change -15 -15 -15 -10 -10 HRW Gulf Month Basis Dec +115/H Jan +115/H Change -18 -20 Trains Deliverable Stocks (Thou Bus): Dec 12th Week Ago Del Total Del Total Chicago 8,931 9,231 8,890 9,190 Toledo 19,060 19,380 19,207 19,527 Year Ago Del Total 10,370 10,370 25,263 25,465 Hutch KC Salina Wichita 16,237 7,103 10,832 18,243 16,237 7,105 11,412 18,644 16,291 7,288 11,029 19,015 16,291 7,289 11,862 19,417 20,704 10,935 15,794 23,923 21,704 11,103 15,908 24,673 Mpls. Duluth 5,466 15,416 5,466 16,216 5,483 15,753 5,483 16,548 4,076 14,463 4,076 15,707 Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Information contained herein is believed reliable. Benson Quinn Commodities, Inc. does not guarantee that such information is accurate or complete. Opinions expressed reflect judgment at this date and are subject to change without notice. BQCI is a wholly owned subsidiary of Archer Daniels Midland Company An Introducing Broker for ADMIS 701 South 4th Avenue, Suite 800, Minneapolis, MN 55415, 1-800-438-7070